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The impact of cull cow prices on herd expansion

An ag economist says rising prices for cull cows could hinder expansion of the U.S. cattle herd.

Josh Maples with Mississippi State University Extension says two-dollar cull cow prices are not crazy.  “You can get really, really strong prices for those cows,” he says.  “Especially if we bring in less trim from places like Brazil.”

He says the U.S. beef industry needs more lean trim to meet consumer demand for ground beef, but it is facing tight domestic supplies and a shortage of imports from the ongoing ban on live cattle from Mexico.

Brazil has helped fill the gap in the U.S. supply chain, but last month the U.S. imposed a 50 percent tariff on beef imports from Brazil, bringing the effective rate for Brazil to 76 percent.

Maples tells Brownfield there will likely be a lot less trim imported from Brazil.  “I’m not saying that’s a good or bad thing,” he says.  “I’m just saying that’s certainly going to have an impact on our cull cow prices here as we need to find other ways to get that trim to blend with the fatty trimmings coming off of our fed cattle.”

He says producers will have difficult decisions to make. “What does the producer do when they have $2.00 plus cull cow prices,” he says.  “They want to keep her around because they expect good cash calf prices next year. But, man, that looks like a pretty enticing culling opportunity.”

Maples says whether producers decide to cull cows or hold them back will go a long way in determining whether the cattle herd begins to stabilize and eventually expand.